The News About The News

News coverage of a press conference, not a TV camera in sight. But most people still get their news from their TV sets. Attribution: Kai Mörk. Creative Commons Attribution 3.0 Germany license.

During the past twenty years, each of the network’s evening newscasts have lost half of their viewers. These days, about 18 million Americans—that’s 18 million out of 240 million American adults—watch the nightly network news on ABC, CBS or NBC, with another 1 million watching PBS NewsHour. Still, most Americans still get their news by watching local and network television—that number hovers around 60 percent. If online is the second most popular source, it won’t be second for long, and it may have overtaken television in many peoples’ lives. Despite its convenience, radio is on a steadily decline; since 1991, it has lost about half of its role as a news provider. Its decline roughly matches the decline of newspapers, down.

For the most part, we pay for our news by watching and reading advertisements, and clicking on some, too. Advertising accounts for more than 2/3 of financial support for news. The second largest segment? Direct payments from the audience in the form of subscriptions, roughly 1/4 of the pie—the portion of your cable bill that pays for CNN, your subscription to a newspaper, your contribution to NPR or one of its member stations.

In the U.S., the news business is a very substantial: about $64 billion per year. That’s about 1/10 more than Google, which is, of course, just one company. Starbucks is about 1/4 of the size of the U.S. news business, but the global video game industry is about twice the size, so maybe Americans (alone) spend as much money on videogames as they do on news.

About 1/3 of all Americans now watch news video online, and that fraction increases to 1/2 for those in the 18-49 age group, but this is still a very small part of the whole news business—less than 10 percent of revenues, in fact.

Newspapers are changing—essentially eliminating their printing presses, trucks, ink and other 19th century concepts in favor of digital distribution. Among all newspapers, 1/4 to 1/3 of readers are using a digital device regularly, and among the 15 largest newspapers, nearly 1/2 of readers are enjoying their daily or weekly editions on screens, not on paper.

In just six years, Time Magazine and The Economist have lost about half of its newsstand sales—once a common model, picking up the magazine at the newsstand, now seems hopelessly old-fashioned. The New Yorker and The Atlantic have lost only about 1/4 of their newsstand sales. The decline is steady, and probably inevitable, but it’s difficult to explain why certain magazines have lost so much more than others. During the same period, revenues for Fox News Channel have doubled (but both CNN and MSNBC have shown only modest gains). In case you’re curious, it costs about $800 million a year to run Fox News, and about the same amount to run CNN (MSNBC costs less than $300 million.)

Five or six years ago, many journalists panicked because their industry seemed to be disintegrating. Some decided to take action. Since 2008, more than 100 digital nonprofit news outlets have popped up all over the country (in just about every state except Utah, the Dakotas, Mississippi, Alabama, and Utah. The San Francisco Bay area, Los Angeles, Washington DC, Philadelphia, New York City and Boston have been especially well-served. Some are sponsored by universities or nonprofits, some are independent, some are foundation funded. It’s certain a significant trend, albeit a new and fragile ecosystem. Many began with the financial assistance of a startup grant, typically under $100,000, that renewed only some of the time for a second go-round. Still, foundation funding is the principal source of funds for many of these fledgling operations. They deserve our support—especially during the critical early years. Happily, most surveyed felt that they would succeed in the long run through a combination of advertising, sponsorships, live events, individual subscriptions, and other forms of economic support. This an interesting phenomenon, and you can read more about it here.

The biggest change? Digital news sites are now strong enough to hire top journalists from newspapers, and entrepreneurs (Jeff Bezos, Pierre Omidyar) are investing in the future of news gathering and distribution. The good news: this once-doomed industry is again showing signs of life, imagination and energy. As you time permits, I encourage you to fully explore the SPECTACULAR collection of reports that comprise the Pew Research Center’s Journalism Project’s State of the News Media 2014 report. It’s all online. Or, download Overview PDF here.